Choosing the perfect business communication platform can be a daunting task for organizations! As a business owner, you need to scan the market and remain up-to-date to understand the various options available in the market. 

If you have not started, don’t worry! 

Read on to find out more about PBX providers, reasons to get PBX, and the differences between PBX and VoIP technology. It will help you make an informed decision and invest in the best platform for your organization.

What Is PBX?

A private branch exchange ( PBX) is a versatile business phone platform used to connect various office desk phones to a shared network. Hence, an organization using PBX can make all internal calls free and transfer calls without hassle.

An organization that invests in a PBX system can keep more physical phones than phone sets than the number of phone lines. PBX technology uses extensions to redirect calls to any team members in your organization. Most companies use cloud-hosted PBX solutions offered by VoIP providers that do not require any complex installation issues.

Difference Between IP PBX and VoIP

In the current era, most PBX platforms utilize a digital networking protocol commonly known as IP (Internet protocol) for internal calls. Hence, they are called IP PBX solutions. They convert the digital signals directly, and callers use phone lines securely connected to the public switched telephone network (PSTN). 

However, with Voice-over-Internet Protocol, you can make or receive calls over the Internet. The technology transfers the audio data to the service provider, and data centers convert it to analog and transfer them to the PSTN. Both VoIP and PBX technologies work well for different kinds of businesses – you need to assess their pros and cons to decide what system will work best for your organization!

What Is VoIP?

A revolutionary technology, VoIP transfers voice data over the Internet at the speed of light. VoIP phones are used to record voice, and these data packets are compressed and sent to the VoIP service provider. They are converted into analog signals to provide cost-effective and apex-quality business communication.

Organizations across the globe are leveraging the power of VoIP technology. The global VoIP services market is expected to reach $194.5 billion by 2024 – a clear indicator of its growing popularity! 

If you are still wondering whether to go in for PBX or VoIP, read on to understand the main differences between the two technologies to invest in the best match!

Top Differences Between VoIP And PBX

Top Differences Between VoIP And PBX

Choosing the right platform is crucial – it will streamline business communication processes and catapult bottom-line results. Here are some significant differences between VoIP and PBX systems that can help you make the right decision:

1. Initial Investment:

Money matters! The upfront cost of your business communication platform can dent a big hole in your pockets. With a PBX system, you will need to make a large initial investment – it requires expensive hardware, routers, software, and a long-term power supply. You also need to consider the money spent on phones and headsets as the PBX system cost.

VoIP business phone systems do not require a heavy upfront investment – all you need to get is the IP phones. VoIP is a more cost-effective technology than PBX as the service provider handles all the major equipment.

2. Operating Expenses:

After the initial investment, it is the running cost of your business phone platform that can drive efficiency and add value! 

VoIP phone systems do not have a high operating cost – users have to choose a suitable subscription plan to avail of all services and features. Most service providers offer customizable pricing plans to suit any kind of organization’s budget.

Organizations that use PBX technology may have higher operating costs that include on-site maintenance, software upgrades, and licenses, and phone bills. The business landline costs alone can be 60% higher than VoIP systems.

3. Call Quality:

It is imperative to choose a business phone solution that delivers the best call quality! The call quality of VoIP phone systems has improved tremendously since the first IP phones came into existence in 1995. Now, users can enjoy an excellent experience without any interruptions or dropped calls.

The voice quality of PBX is as good as virtual phone systems; however, it ultimately depends on the quality of the hardware equipment. With the right software and phone equipment, PBX technology is not behind VoIP in terms of call quality.

4. Scalability:

One of the best parts about VoIP phone systems is that they are highly scalable; hence they can expand according to the growing size of your business. Multiple office branches at different geographical locations can benefit from one VoIP plan, and most service providers can add on extra modules and phone lines at a minimal cost.

On the other hand, PBX technology is not scalable. Users need to add more phone lines and build on to the existing hardware capability that may take time and add on to expenses.

5. Mobility:

Mobility is the number one advantage of modern-day VoIP phone solutions! It enables your team members to take calls from anywhere in the world – all they need is a working Internet connection to log in from a mobile phone, laptop, smartphone, or personal computer.

With on-premise PBX solutions, organizations function through an internal network that can connect to their phones. Hence, the phones cannot be used outside the physical office site. This restricts mobility as team members cannot make or receive calls when they are not present in the office location.

6. Security:

Undoubtedly, security is a prime concern for organizations while implementing a phone system. VoIP systems are generally highly secure as the VoIP service provider handles the security protocols. While choosing a VoIP vendor, make sure to discuss their security policies and whether they have data encryption to safeguard sensitive organizational information. With PBX systems, your external calls are directly routed to the PSTN. The phone system is internally connected and has exposure to the Internet; hence there is minimal risk of hacking or malpractice.

7. Upgrades:

Upgrading a PBX system can be quite challenging as you will need to invest in new hardware and have technicians conduct the upgrade process. However, with a VoIP platform, organizations do not need to worry about system upgrades as the service provider handles them. Hence, it is much easier to maintain VoIP business phones in comparison to PBX systems.

8. Customization:

PBX phone systems can be customized; however, it is a time-consuming process that involves organizations purchasing specific hardware and utilize technical assistance. On the other hand, VoIP phone systems are highly customizable – your service provider can easily give you the features you need without any complex hardware changes!

9. IT Infrastructure:

Organizations opting for PBX technology need to maintain a huge IT infrastructure to deal with upgrades and maintenance issues. With VoIP, companies do not need any IT staff as the service provider handles all the software and hardware requirements. This makes VoIP phone solutions a better choice for smaller organizations without an IT department.

10. Reliability:

In terms of reliability, both PBX and VoIP phone systems are highly reliable and deliver apex voice quality. However, an on-premise PBX phone system may require companies to maintain qualified IT staff on the premises to troubleshoot or resolve any technical issues.

11. Outages:

In PBX phone systems, the internal servers and gateways are dependent on electricity; hence a power cut can be a problem and lead to outages. VoIP phone systems connect the PSTN through an Internet connection through a modem; hence need electricity. Hence, both PBX and VoIP technology need electricity to function and will go offline with an outage.

The Final Word

PBX and VoIP both have advanced features and technology. Organizations need to check out both phone systems to know what will work for them and invest in an intelligent solution that will drive bottom-line results!

Updated : September 6, 2021

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